The Four P's of Google
Marketing Mix Price
Price
Price is another component of the four Ps of the market mix. Price
is defined as “The amount of money charged for a product or
service or the sum of the values that consumers exchange for the
benefits of having or using the product or service” (Armstrong,
Gary and Philip Kotler 353). It is extremely important for marketers
to remember that individuals in a market are highly receptive not
only to the price of an item, but also to the value offered by the
product.
Successful companies such as Google take special consideration
at the different parts involved in setting its prices. Item such
as list price, discounts, allowances, payment periods and credit
terms are items that work together to set the price of its merchandise.
List price is one of the fundamentals components of setting a price.
List price is defined as, “Price normally quoted to potential
buyers” (Boone, Louis E. and David L. Kurtz 718). It is the
basic price offered to prospective consumers, yet in many instances
the price listed could increase or decrease as costumers select
options. Google’s price for AdWords is set on the amount of
advertisement per day it provides its consumers. In Google’s
case the list price is at five cents per day, however it can go
as high as $50.00 per day. The price difference will depend on the
amount of advertisement per day that the consumers are willing to
pay and the amount of times individuals click to see the ads and
how high these ads rank on a search page.
Discounts are another element of price setting. The three types
of discounts are quantity, trade and cash. Quantity discounts are
offered to consumers for buying in bulks or in large quantities.
Trade discounts is defined as, “Payments to a channel member
or buyer for performing marketing functions; also called a functional
discount” (Boone, Louis E. and David L. Kurtz 719). Last but
not least are cash discounts offered to customers for the punctual
payment of their invoices. At the moment Google AdWords is not offering
consumers any of the discounts mentioned above.
Another necessary item to set price is Allowances. Allowances are
very similar to discounts because it also offers to lower the list
price, yet it includes extra items not covered by discounts. Two
major types are trade-in and promotional allowance. Trade-ins are
commonly used in reducing the amount consumers must pay for a product
by recognizing the value of a used product. Car Dealerships are
a good example of companies that provide allowance to consumer based
on trade-ins. Promotional allowance are, “Promotional funds
provided by a manufacturer to other channel members in an attempt
to integrate promotional strategy within the channel” (Boone,
Louis E. and David L. Kurtz 721). Fast food franchisers are organizations
that provide promotional activities, such as television ads, to
attract costumers to its franchisees. Google at the moment is not
providing its customers with discounts nor allowances in its Google
AdWords program.
Marketers promoting a product need to take into consideration payment
period offered to its costumers. There are different ways in which
a company can set the length of time required to pay a bill. For
instance organizations can set the time based on the requirements
of its competitors. Google payment period is based on its relationship
with its customers. New customers located in specific countries
need to make their payments with a credit card or by direct debit
payments. As soon as the finance department receives the financial
information and it is approved, the ads begin to run, yet if a customer
has a long and positive relationship with Google its financial department
might be able to set a monthly account. This is based on the credit
history of the customer.
Last but not least, the credit terms required by an organization
to finalize the product price. Google’s structure tightly
relates payment periods with credit terms, yet each organizations
credit terms vary depending on the type of industry. As mentioned
earlier, Google provides a monthly credit limit for those customers
with good financial record. The credit limit starts at $50.00 a
month and it can increase to more than $500.00 a month.
In sum, price is also an important tool within the 4 P’s
of the marketing mix, yet it is important to remember that consumers
are also interested in the products value. In many instances if
the product does not deliver value the product will be doomed for
failure, regardless of its price. Thriving organizations, such as
Google, take into consideration list price, discounts, allowance,
payment period and credit terms as relevant elements to consider
when setting the price.
1
> Google 4 Ps Introduction
2
> Google 4 Ps Product
3
> Google 4 Ps Price
4
> Google 4 Ps Promotion
5
> Google 4 Ps Place
6
> Google 4 Ps Recommendations
7
> Google 4 Ps Conclusion
Google
Related
Smart
Home Technology
Leapfrog
and Powertouch
Internet
Radio Creation
Pressure
Sensitive Label Waste
Project
Management
Wine
Database System
Nestlé
Case Analysis
Enron
Collapse
Ecommerce
Shopping Cart Software
Topics
[ Tech
Business ] [ Computer
Engineering ] [ Electrical
Engineering ] [ Selected
Topics ] |